Social Security Adopts CARE Formula to Boost Low Pensions

Thailand's Social Security Office has announced revisions to its old-age pension formula, confirming the adoption of the CARE formula to compensate those receiving lower payouts, with payments beginning in the next period.

On July 14, 2025, Social Security Office Secretary-General Kanjana Poolkaew revealed the pension formula improvements cover several key issues. The office adjusted calculations for those who contributed for fewer than 12 months, allowing them to receive benefits from both employee and employer contributions plus earnings, instead of only their own share. For contributors exceeding 180 months, the office reformed the pension rate calculation, changing from a 1.5% increase per completed 12-month period to a 0.125% monthly increase based on actual contribution months, better aligning benefits with contribution duration.

Another major change involves adjusting the wage base used for pension calculations from the average of the final 60 months before retirement to the lifetime average of all contribution months, with past wages adjusted to current value before applying CARE principles. This reflects lifetime earnings and reduces disparities from late-career income shifts. A five-year transition protection has been established for new retirees whose new-formula pensions fall below the old formula, providing tapering compensation starting at 100% in the first year and declining to 20% in the fifth year.

For current retirees, if recalculation under the new formula results in higher benefits, the Social Security Office will increase their pensions in the next payment period, though no retroactive payments will be made for past periods. This pension formula revision represents a significant step toward developing a fairer and more modern Thai social security system aligned with changing economic conditions, ensuring sustainable income security for workers after retirement.